Results analysis from Kepler Trust Intelligence

RNS Number : 6919D

Ashoka India Equity Investment Tst

04 March 2022

 

Ashoka India Equity (AIE)

04/03/2022

Results analysis from Kepler Trust Intelligence

Ashoka Indian Equity (AIE) released its half-year results for the six months ending 31 December 2021 on Friday. The trust delivered NAV total returns of 25.2% over the period, outperforming the benchmark, the MSCI India IMI, which generated a total return of 15.4%. Total share price returns over the half-year were 100bps higher at 26.2%.

The Indian corporate earnings cycle is improving after a decade of sluggish growth. As per consensus, earnings for the Nifty 50 index are estimated to grow by 32% in FY22 and 17% in 2023. Public sector capital expenditure has also risen at a 28% two-year CAGR in the FY22 (year ending March 2022) financial year to date.

Kepler View

AIE has posted another set of strong results that build upon an impressive track record. It has been the top performer in its peer group and delivered strong outperformance relative to its benchmark since 31/07/2018, when the trust was first fully invested post-IPO.

Like much of the wider market, AIE has seen a downturn since the start of the year due to inflationary pressures and the uncertainty caused by the Russia-Ukraine conflict. It now trades at a 3.7% discount to NAV, a rarity for the trust since its launch in 2018.

Looking ahead, the trust's overexposure to the financial, industrial, and materials sectors may help it weather the prospective storm of inflation. The blanket sell-off we've seen in 2022 has also not been particularly discriminating, so it may be that fundamentals have, in some cases, fallen behind share prices. For investors that are prepared to look past some of the current uncertainty in the market and remain bullish on India, AIE continues to offer an attractive dedicated exposure to the country…

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